Profit bid from wheat-deal kickbacksJanuary 17, 2006WHEAT...

Profit bid from wheat-deal kickbacks

January 17, 2006
WHEAT exporter AWB might have made a profit from some of the hundreds of millions of dollars it paid to Iraqi dictator Saddam Hussein's government under an elaborate scheme of kickbacks, an inquiry has been told today.

Evidence to an official inquiry into the scandal has revealed the monopoly wheat marketer was well aware of an opportunity to make money from the kickbacks regime that resulted in the company inflating the price of its wheat contracts under the corruption-ridden United Nations oil-for-food program.

The company's embattled chief executive, Andrew Lindberg, came under strong pressure on the witness stand today to reveal what he knew, and when, about the payments that funnelled $300 million of the company's money into the despot's pocket.

But in an extraordinary piece of evidence, the Commission of Inquiry's senior counsel, John Agius SC, tendered a document showing the kickbacks were seen by senior AWB managers as a chance to turn a profit and get more money from the UN account that paid suppliers under the oil-for-food program.

The document, a report by two executives in 2001, spoke of a 10 per cent "after sales service fee" that was being levied on AWB by the Iraqi government.









That fee, added to an existing kickback AWB was paying for trucking services that were never actually provided, inflated the wheat prices the company received.

"We believe the increase in trucking fee ... is a mechanism of extracting more dollars from the (UN's) escrow account," the report said.

The fee was expected to be paid in German marks, giving AWB "an opportunity to make a margin on the foreign exchange hedge".

Mr Lindberg admitted AWB might have made a profit from the exercise.

"That may have been the case," he told the inquiry, but added that the currency hedging process was risky and could also have resulted in a loss.

"They may have been successful, they may have been unsuccessful.

"I'm not aware of specific, individual transactions."